Last month, a class action lawsuit was filed in New York federal court against Bed Bath & Beyond by department managers and assistant managers who claim that the Company failed to pay them overtime compensation pursuant to the Fair Labor Standards Act and New York Labor Law.
Plaintiffs claimed that although their title was that of a manager, they performed routine work of store employees, including, stocking shelves, dusting, cleaning bathrooms, organizing sales floor, building fixtures, preparing orders for pickup and performing cashier duties. The Company paid department managers pursuant to a fluctuating work week model which entitles employees to an overtime premium of 50 percent, instead of the regular 150 percent overtime premium (time-and-a-half), for hours worked in excess of 40 per week. In order to use this method, however, certain pre-requisites must be met, that is, 1) the employee’s hours must fluctuate from week to week, 2) the employee must receive a fixed weekly salary which remains the same regardless of how many hours are worked per week, 2) the employee’s regular rate is at least minimum wage, and 4) the employer and employee have a clear mutual understanding that the employee will be paid a fixed weekly salary regardless of the amount of hours worked. Here, the department managers claimed that the Company was not entitled to use the fluctuating work week model because the conditions to use that method, such as the fluctuation of employees’ work hours, were not met. In this regard, the department managers alleged that they their weekly work hours did not fluctuate in that their number of scheduled work hours and overtime hours were consistent from week to week. Further, the assistant store managers in the lawsuit allege that they were misclassified as exempt employees and were unlawfully denied overtime pay.
An answer to Plaintiffs’ Complaint is expected in the upcoming weeks.